A long-standing supporter of the Militant tendency, Nellist was the MP for Coventry South East from 1983 to 1992. He was known for his standing as a "workers' MP on a worker's wage", taking only the wage of a skilled factory worker, which amounted to 40% of what was then an MP's salary. The rest he donated back to the Labour movement and to charities. From 1982 to 1986, Nellist was also a Labour councillor for Coventry on West Midlands County Council.

When Tony Blair was first elected to Parliament in 1983, he initially shared an office with Nellist at the Palace of Westminster. The duo's differing political views were considered not to make for the most harmonious working environment, so Blair was quickly allocated office space with Gordon Brown, another newly elected Labour MP, and Nellist subsequently shared the office of the other Militant supporting MP, Terry Fields.[1]

In late 1991, shortly before his expulsion from the Labour Party, he was awarded the "Backbencher of the Year" award by the conservative Spectator magazine.[2]Michael White of The Guardian recalled in 2007 the speech Nellist gave after receiving the award: "It was witty and highly political, done with style and without compromise. They cheered him fervently and then returned to their brandy. But it was one of the best speeches I have ever heard."[3]

Nellist in 1991 was one of the two MPs who were supporters of Militant, which had been found to contravene the Labour Party constitution several years earlier. After a National Executive Committee meeting in December 1991, along with Terry Fields, the other MP, he was expelled from the Labour Party and deselected as a candidate for the 1992 general election.

Nellist gained the support of his Constituency party (which was subsequently suspended by the National Executive Committee) and a number of local trade unions.[4] Standing as an Independent Labour candidate in the elections, he narrowly lost his old seat to the new Labour Party candidate Jim Cunningham. Cunningham received 11,902 votes, Conservative Party candidate Martine Hyams 10,591, and Dave Nellist 10,551, or 28.9% of the vote.[5]

Nellist followed the majority of Militant in founding what became the Socialist Party (not to be confused with the Socialist Party of Great Britain). Due to registration requirements, the party uses the name "Socialist Alternative" on ballot papers. Instead of running candidates independently, however, the party has played a leading role in several political coalitions, including the Socialist Alliance.

Nellist was a prominent figure in organising the Socialist Alliance, locally and across the UK, as a loose formation of individuals and groups. He became the Chair of the Socialist Alliance, but resigned in 2001, in protest of what the Socialist Party saw as manoeuvrings of the Socialist Workers Party to take control of the Alliance. He is involved in the Campaign for a New Workers' Party in Britain, which is a Socialist Party sponsored campaign to create a new party to represent the working class in the UK.

Nellist has run for Member of Parliament in every general election since his deselection by the Labour Party. In 1997, he ran in the Coventry South constituency, and received 3,262 votes (6.5%). In 2001 and 2005, he ran in the Coventry North East constituency. In 2001, he received 2,638 votes (7.1%). In 2005, he received 1,874 votes (5.0%).

In 1998, Nellist was elected as a City Councillor in the Coventry City Council for St Michael's ward, where he was reelected in 2004 and again in 2008, with an increased majority, when he received 48.6% of the vote.[6][7] By 2006, when Rob Windsor was elected, the Socialist Party had won all three of St. Michael's seats.[8] However, Nellist's Socialist colleagues were defeated in the local elections of 2007 and 2010, respectively,[9][10] and in the 2012 local elections, Nellist lost his seat in the St Michael's Ward to the Labour Party candidate Naeem Akhtar by 213 votes.[11]

In August 1984, Nellist married Jane (née Warner) in North Yorkshire. In 2014 she was elected as a member of the National Executive Committee of the National Union of Teachers. They have three daughters (two born 1985 and one born 1987), and one son (born 1989).

From 1992 to 1997 he worked on welfare rights cases for Robert Zara Ltd, solicitors in Coventry. Since 1997 he has been a case worker for the Citizens Advice Bureau.